International Construction Costs Smart decisions creating long-term value

Further reading:
Full article: Practices and techniques for construction projects cost control tandfonline
6 Cost Control Strategies in Design-Build Construction Projects build-review

The document titled “International Construction Costs 2019” provides a comprehensive analysis of construction costs across various global markets, highlighting trends, factors influencing costs, and projections for the future. Below is a summary of its key points.

Overview of Construction Costs

The report presents an index of construction costs in different cities worldwide, illustrating significant variances influenced by local economic conditions, labour markets, and material prices. The analysis shows that while some cities remain relatively inexpensive for construction, many are experiencing upward pressure on costs due to inflation and increased demand.

Key Findings

1. Global Cost Trends:
   • The overall construction cost index has shown a general convergence, with the range of costs across cities decreasing by over 10% compared to previous years. This suggests that even traditionally cheaper markets are becoming more expensive
   • Several cities have been categorized as “hot” or “overheating,” indicating rapid increases in construction costs. Conversely, some markets are cooling down, reflecting a stabilization in cost growth
2. Regional Highlights:
   • Asia: Countries like Hong Kong and Singapore are noted for high labor costs and rising material prices. The construction market in Singapore is projected to grow by 5% in 2019, driven by government initiatives to enhance industry efficiency through technology like Building Information Modeling (BIM)
   • North America: The U.S. and Canada are experiencing moderate growth in construction costs, with tender price indices expected to rise by 3-4% annually. Factors such as trade tensions and labor shortages are contributing to these increases
   • Europe: Cities like London and Dublin are facing significant cost escalations, with increases around 5% expected. Economic uncertainties surrounding Brexit have also impacted construction sentiment in the UK
3. Cost Influencers:
   • Key factors affecting construction costs include local economic conditions, regulatory changes, labor availability, and material supply chains. For instance, rising wages in various regions are contributing to higher overall costs
   • The report emphasizes the importance of understanding local market dynamics when assessing construction costs, as variations can be substantial even within the same country.
4. Future Projections:
   • The document forecasts that global construction costs will continue to rise due to ongoing economic growth and infrastructure demands. It anticipates an average increase of 5-6% in tender prices over the next few years
   • Emerging markets are increasingly becoming attractive for investment due to their potential for growth despite current cost challenges.

Conclusion

The “International Construction Costs 2019” report serves as a vital resource for stakeholders in the construction industry, offering insights into current trends and future expectations. It highlights the complexities of comparing construction costs internationally and underscores the necessity for localized understanding when planning projects. As global economies evolve and infrastructure demands grow, careful consideration of these factors will be essential for successful project execution.This summary encapsulates the major themes and findings from the document while providing a clear perspective on international construction cost trends as of 2019.